The Federal Court has found that a Sydney businessman, Bruce Binns, infringed copyright in the US company Winnebago’s name and logos over a 30-year period.
The court found Binns, through his company Knott Investment, deliberately exploited Winnebago’s brand, logo and its reputation, and breached the Trade Practices Act and the Australian Consumer Law.
Winnebago Industries has been making its motor homes in the United States since 1966 but Knott Investments, which has nothing to do with the US company, began making similar vehicles in Sydney from at least 1982.
Binns called the motor homes Winnebagos, advertised and marketed the vehicles using logos almost identical to those of the US company, and even placed an advertisement in the magazine Caravan World containing the text: “You’d expect nothing less from Winnebago, the world’s most respected name in luxury motor homes.”
Justice Lindsay Foster said Binns traded on the US company’s reputation for 30 years and “intentionally hijacked” the brand “in a bold attempt to pre-empt Winnebago’s opening its doors here”.
“No doubt Bruce Binns thought that, by taking such action, he could keep Winnebago out of Australia or, at the very least, hold it to ransom and extort a significant payment from Winnebago,” he said.
“I find that, by choosing to exploit the Winnebago name and the Winnebago logos, he was intending to gain for himself as much benefit as possible in Australia from the goodwill and reputation of Winnebago and its recreational vehicles.
“His decision was motivated by a keen appreciation that he and his associates would gain financial benefit from using the Winnebago marks in Australia.”
The court heard that Winnebago first became aware of Binns’ activities in 1985 but did very little about this infringement until 1991 when the company started negotiations with Binns.
In September 1992, a settlement agreement was executed by Winnebago, Binns and Knott, and Knott continued to exploit the Winnebago marks in Australia. In 1997, he registered Winnebago as a trademark in Australia.
However, in recent years, Winnebago began to show real interest in manufacturing RVs for import and sale into the Australian market. In 2010, it made a demand that Knott stop using the Winnebago marks. After being rebuffed by Knott, Winnebago commenced this proceeding.
Justice Foster noted the “extraordinary delay” by the US company in protecting its rights, and that it did nothing until 1991, despite knowing of Binns’ activities six years earlier.
Chris Round, partner in the intellectual property group at Middletons, told SmartCompany the judgment was not surprising, as Justice Foster had made “damning findings” about Binns and his credibility.
“The lesson is don’t go overseas and adopt the name of a well-known company, and don’t associate yourself with that company in advertising,” Round says.
Round says the interesting things about the case are Winnebago’s delay in defending its name and trademark and the agreement the company entered into with Binns in 1992.
“The delay was not fatal to the application, often people think that because a position has been reached for 30 years that it is set in stone, but this judgment indicates that is not necessarily the case,” says Round.
“A plaintiff who has a cause of action for misleading and deceptive conduct and passing off can seek to enforce that even after 30 years.”
Round speculates that Winnebago agreed to enter into an agreement with Binns in 1992 because the company decided to protect its position without incurring the cost of litigation.
“Australia is a very small fish in a very big pond, probably they looked at the cost benefit analysis of seeking to litigate in 1991 and decided against it for commercial reasons,” says Round.
“But I think if Winnebago had litigated in 1991 it would have won.”
The Federal Court judgment means that Winnebago should now be able to register its own trademark and dealers selling the Knott motor homes will be required to stop selling them.
“The case concerns specific dealers of Knott and those specific dealers have been restrained and the judge has asked Winnebago to work out a period of time in which they can cease dealing in these products. Ultimately, they are going to have to stop,” says Round.
“Winnebago filed its own trademark application in 2010 and now that it has revoked Knott’s registration their application should proceed to registration.”
A spokesperson for Knott Investments told SmartCompany that Binns and the company had no comment.